Cost-effectiveness of Cell and Gene Therapies

By August 27, 2018Commentary

The most intriguing area of actual medical practice right now is the area of cell and gene therapy, which is finally coming to fruition after years of work and speculation.  Unfortunately, these therapies apparently will be far more expensive than even many specialty medicines, leaving the payer community wondering how they can possibly be afforded.  The Alliance for Regenerative Medicine, which represents largely the interests of developers of the therapies issues a commissioned report by IQVIA on a framework to think about the economic impact and cost-effectiveness of the therapies.   (ARM Report)  The report is fairly lengthy and summarizes experience and approaches to data with approved therapies.  The most interesting aspects of the report may be the list of potential inputs into determining cost and value.  These include not just the cost of the actual therapy and the medical services need to deliver and monitor it, but such things as loss of productivity, formal and informal caregiver burdens, non-medical costs–such as transportation, costs for treating adverse events and other items.  What is nearly impossible to define is the value to the patient of staying alive, even if the quality of life is low.  Almost all patients want all kinds of heroic efforts, however futile or unlikely to succeed, made to treat their disease.  This is a cultural issue, but turns into a political one when patient advocacy groups and others insist that these efforts be covered by payers.

A big black box is the actual cost of the therapies to develop and deliver.  I am certain that the drug manufacturers, who do and will own most of these therapies, will price them with their usual, shall we say, very high (that is a kind adjective) margins.  The FDA does not really consider economics when approving therapies, so it can’t help.  It may consider comparative effectiveness, especially if a therapy has significant side-effects.  Other countries have national health insurance systems and that single payer often does make decisions about it will cover on the basis of cost, among other factors.  In the US, payers are pretty much on their own.  They can follow the lead of CMS, which makes decisions for the Medicare program, but CMS is often forced to do things for political reasons.   This isn’t just about the payers’ money; consumers are going to have substantial cost-sharing on these therapies and premiums for employers and individuals will go up as they become more widespread.  There needs to be some mechanism for keeping the prices under control and/or making sure that these therapies are only used for patients who will clearly benefit.  A good starting point would be to force the therapy owners to disclose the actual costs for a therapy, and to have those costs audited and the results available to the public.  Some drastic changes are needed, otherwise, these therapies really do have the potential to bankrupt the system.

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